Exhibit 10.25

                             MASTER LEASE AGREEMENT

      THIS MASTER LEASE  AGREEMENT  (the "Lease") is made as of the 12th day
of November,  1998, by and between GENERAL  ELECTRIC CAPITAL  CORPORATION,  its
successors and assigns  ("Lessor"),  and TRANSIT GROUP, INC.,  CAROLINA-PACIFIC
DISTRIBUTORS, INC., CERTIFIED TRANSPORT, INC., RAINBOW TRUCKING SERVICES, INC.,
TRANSIT LEASING,  INC. f/k/a CAPITOL WAREHOUSE INC.,  TRANSPORTATION  RESOURCES
AND  MANAGEMENT,  INC.,  CARROLL FULMER & CO., INC., KJ  TRANSPORTATION,  INC.,
SERVICE  EXPRESS,  INC.,  DIVERSIFIED  TRUCKING  CORP.,  J&L TRUCK  LEASING  OF
FARMINGTON,  INC. and NORTHSTAR  TRANSPORTATION,  INC.,  their  successors  and
permitted assigns (collectively, ALessee").

         Concurrently with execution of this Lease,  certain of the parties are
executing that certain Master  Security  Agreement  dated as of the date hereof
(the ASecurity Agreement@),  in connection with which Lessor shall make certain
loans (the  ALoans@).  The  aggregate  amount of such  Loans and the  aggregate
Capitalized  Lessor=s Cost of the Equipment to be acquired and leased  pursuant
to this Lease,  in accordance  with the terms of the Security  Agreement and of
this Lease, shall be $50,000,000.00.

         The  parties  agree that Lessee  shall lease from Lessor the  property
(the  "Equipment")  described in the Schedule(s) to be executed pursuant hereto
(collectively,  the  "Schedule"),  subject to the terms set forth herein and in
the Schedule. Certain definitions and construction of certain of the terms used
herein are provided in Section 21 hereof.

         Each Schedule shall  incorporate by reference the terms and conditions
of this Master Lease Agreement.  Each Schedule,  incorporating by reference the
terms and  conditions  of this  Master  Lease  Agreement,  shall  constitute  a
separate instrument of lease.

         1. TERM.  The term of lease with respect to any item of the  Equipment
shall consist of the term set forth in the Schedule relating thereto; provided,
however,  that  this  Lease  shall  be  effective  from and  after  the date of
execution hereof.

         2. RENT.  (a) Lessee shall pay Lessor the rental  installments  in the
aggregate  amounts  specified in the Schedule,  without prior notice or demand,
and all other amounts  payable  pursuant to this Lease (such  installments  and
other amounts,  the "rent").  Each Schedule  constitutes a  non-cancelable  net
lease,  and  Lessee's  obligation  to pay rent,  and to  otherwise  perform its
obligations under this Lease, each such Schedule and all of the other documents
and  agreements  entered  in  connection  herewith  (collectively,  the  "Lease
Documents"),  are and  shall be  absolute  and  unconditional  and shall not be
affected by any right of setoff, counterclaim,  recoupment,  deduction, defense
or other right which Lessee may have against Lessor, the manufacturer or vendor
of the Equipment (the "Suppliers"),  or anyone else, for any reason whatsoever.
Rental  installments  are payable as and when specified in the Schedule by wire
transfer of immediately  available  funds to: Bankers Trust New York, New York,
New York 10006, Account No. 50-202-962,  ABA No. 021-001-033,  or to such other
account  as Lessor  may  direct  in  writing;  and  payments  of rent  shall be
effective  upon  receipt.   Timeliness  of  Lessee's   payment  and  its  other
performance  under the Lease  Documents is of the  essence.  If any rent is not
paid within ten (10) days of its due date,  Lessee  agrees to pay a late charge
of five cents ($.05) per dollar on, and in addition to, the amount of such rent
but not exceeding the lawful maximum, if any.

                  (b) If, solely as a result of Congressional  enactment of any
law  (including,  without  limitation,  any  modification  of, or  amendment or
addition to, the  Internal  Revenue Code of 1986,  as amended,  (ACode@)),  the
maximum effective corporate income tax rate (exclusive of any minimum tax rate)
for  calendar-year  taxpayers  (AEffective  Rate@) is higher  than  thirty-five
percent  (35%) for any year during the lease term,  then Lessor  shall have the
right  to  increase  such  rent  payments  by  requiring  payment  of a  single
additional  sum calculated so as to preserve  Lessor=s Net Economic  Return (as
such term is  hereinafter  defined).  The  additional sum shall be equal to the
product of (i) the Effective  Rate  (expressed as a decimal) for such year less
 .35 (or,  in the event  that any  adjustment  has been made  hereunder  for any
previous year, the Effective Rate  (expressed as a decimal) used in calculating
the next  previous  adjustment)  times  (ii)  the  adjusted  Termination  Value
(defined below),  divided by (iii) the difference between the new Effective Tax
Rate (expressed as a decimal) and one (1). The adjusted Termination Value shall
be the Termination  Value  (calculated as of the first rent due in the year for
which the  adjustment  is being  made)  minus the Tax  Benefits  that  would be
allowable  under  Section  168 of the Code (as of the first day of the year for
which such  adjustment  is being made and all future  years of the lease term).
The  Termination  Values and Tax Benefits are defined on the  Schedule.  Lessee
shall pay to Lessor the full amount of the additional rent payment on the later
of (i)  receipt  of notice  or (ii) the  first  day of the year for which  such
adjustment is being made.  Lessee's  obligations  under this Section 2(b) shall
survive any expiration or termination of this Lease.

         3.  REPRESENTATIONS  AND WARRANTIES OF LESSEE.  Lessee  represents and
warrants that: (a) Lessee is a corporation duly organized, validly existing and
in  good  standing  under  the  laws of the  state  of its  incorporation.  (b)
Carolina-Pacific   Distributors,   Inc.,  Certified  Transport,  Inc.,  Rainbow
Trucking Services,  Inc.,  Transit Leasing,  Inc. f/k/a Capitol Warehouse Inc.,
Transportation  Resources and Management,  Inc., Carroll Fulmer & Co., Inc., KJ
Transportation,  Inc., Service Express,  Inc.,  Diversified Trucking Corp., J&L
Truck Leasing of Farmington, Inc. and Northstar Transportation, Inc. are each a
wholly-owned subsidiary (directly or indirectly) of Transit Group, Inc. (c) The
sale of those items of the Equipment described on the schedule attached to each
Bill of Sale  (collectively,  the ABill of Sale@)  executed by Lessee  pursuant
hereto and delivered to Lessor, and the execution,  delivery and performance of
the Lease Documents:  (1) have been duly authorized by all necessary  corporate
action  on the  part  of  Lessee;  (2)  do  not  require  the  approval  of any
stockholder, trustee or holder of any obligations of Lessee except such as have
been  duly  obtained;  and  (3)  do  not  and  will  not  contravene  any  law,
governmental rule, regulation or order now binding on Lessee, or the charter or
by-laws of Lessee,  or contravene  the  provisions  of, or constitute a default
under,  or result in the creation of any lien or encumbrance  upon the property
of Lessee under, any indenture,  mortgage, contract or other agreement to which
Lessee is a party or by which it or its  property  is bound  which has not been
waived.  (d) Each of the Lease  Documents,  when entered into,  will constitute
legal,  valid  and  binding  obligations  of  Lessee,   jointly  and  severally
enforceable against each Lessee, in accordance with the terms thereof.  Subject
to the release of existing  lien rights,  the Bill of Sale  transfers to Lessor
good and marketable title to the Equipment  described on the schedule  attached
thereto.  Other than the  recording  of  certificates  of title with respect to
motor vehicles, no filing or recordation must be made, no notice must be given,
and no  other  action  must  be  taken  with  respect  to any  state  or  local
jurisdiction,  or any  person,  except  such as have been duly  made,  given or
taken, in order to preserve to Lessor all the rights transferred by the Bill of
Sale.  (e) There are no pending  actions or  proceedings  to which  Lessee is a
party,  and there are no other pending or threatened  actions or proceedings of
which Lessee has  knowledge,  before any court,  arbitrator  or  administrative
agency,  which, either individually or in the aggregate,  would have a Material
Adverse  Effect.  As used herein,  AMaterial  Adverse  Effect@ shall mean (1) a
materially adverse effect on the business,  condition (financial or otherwise),
operations, performance or properties of the Lessees taken as a whole, or (2) a
material  impairment  of the ability of any Lessee to perform  its  obligations
under or to remain in compliance with the Lease Documents.  Further,  Lessee is
not in default  under any  obligation  for  borrowed  money,  for the  deferred
purchase price of property or any lease agreement which, either individually or
in the aggregate, would have the same such effect. (f) The audited consolidated
financial  statements of Lessee (copies of which have been furnished to Lessor)
have been prepared in accordance with generally accepted accounting  principles
consistently  applied  ("GAAP"),   and  fairly  present  Lessee's  consolidated
financial  condition and the results of its  consolidated  operations as of the
date of and for the period  covered by such  statements,  and since the date of
such statements there has been no material adverse change in such conditions or
operations.  (g) The address  stated below the signature of Lessee is the chief
place of business  and chief  executive  office of Lessee;  and Lessee does not
conduct  business  under a trade,  assumed or fictitious  name.  (h) Lessee has
reviewed the areas within its business and operations  which could be adversely
affected  by,  and has  developed  or is  developing  a program to address on a
timely  basis,  the  AYear  2000  Problem@  (that is,  the risk  that  computer
applications  used by Lessee may be unable to  recognize  and perform  properly
date-sensitive  functions  involving  certain dates prior to and any date on or
after  December 31, 1999).  Based on such review and program,  Lessee  believes
that the AYear 2000 Problem@ will not have a Material Adverse Effect. From time
to time, at the request of Lessor,  Lessee shall provide to Lessor such updated
information  or  documentation  as is  requested  regarding  the  status of its
efforts to address the Year 2000 Problem.

         4. COVENANTS OF LESSEE.  Lessee  covenants and agrees as follows:  (a)
Lessee will  furnish  Lessor (1) within  ninety (90) days after the end of each
fiscal year of Lessee, a consolidated  balance sheet of Lessee as at the end of
such year, and the related  consolidated  statement of income and  consolidated
statement of cash flows of Lessee for such fiscal year,  prepared in accordance
with GAAP,  all in  reasonable  detail and certified by  independent  certified
public accountants of recognized  standing selected by Lessee (which shall be a
"Big 6"  accounting  firm);  (2) within  ninety (90) days after the end of each
fiscal year of Lessee, a consolidating balance sheet of Lessee as at the end of
such year, and the related consolidating  statement of income and consolidating
income of cash flows of Lessee for such fiscal  year,  prepared  in  accordance
with GAAP;  (3) within  thirty  (30) days after the end of each  fiscal year of
Lessee,  Lessee=s Board  approved  operating plan for the next fiscal year; (4)
within forty-five (45) days after the end of each quarter, an unaudited balance
sheet of Lessee as at the end of such  quarter,  and the related  statement  of
income and  statement  of cash flows of Lessee for such  quarter,  prepared  in
accordance  with  GAAP,  except  for the  absence  of  footnotes  and  year-end
adjustments;  (5) within forty-five (45) days after the end of each quarter, an
unaudited  consolidating balance sheet of Lessee as at the end of such quarter,
and the related consolidating  statement of income and consolidating  statement
of cash flows of Lessee for such  quarter,  prepared in  accordance  with GAAP,
except for the absence of footnotes  and year-end  adjustments;  and (6) within
ten (10) days  after the date on which  they are filed,  all  regular  periodic
reports,  forms  and  other  filings  required  to be  made  by  Lessee  to the
Securities and Exchange Commission,  if any; and (7) contemporaneously with the
furnishing of the financial statements required pursuant to Clauses (1) and (3)
above, a duly completed compliance certificate dated the date of such financial
statements and signed by the chief  financial  officer of Lessee,  containing a
computation of the financial  ratio set forth in Section 4(e) hereof and to the
effect  that such  officer  has not  become  aware of any  default  or Event of
Default  that has occurred  and is  continuing  or, if there is any such event,
describing  it and the steps,  if any,  being taken to cure it. (b) Lessee will
promptly execute and deliver to Lessor such further documents,  instruments and
assurances  and take  such  further  action  as  Lessor  from  time to time may
reasonably  request in order to carry out the intent and  purpose of this Lease
and to establish and protect the rights and remedies  created or intended to be
created in favor of Lessor under the Lease Documents.  (c) Lessee shall provide
written notice to Lessor: (1) thirty (30) days after any contemplated change in
the name or address of the chief executive office of Lessee;  (2) promptly upon
the occurrence of any Default (as hereinafter defined) or event which, with the
lapse of time or the  giving of  notice,  or both,  would  become a Default  (a
"default";  except as used in Sections 15 and 16); and (3) promptly upon Lessee
becoming aware of any alleged material  violation of applicable law relating to
the  Equipment  or this  Lease.  (d) Lessee  shall pay to Lessor,  monthly,  in
arrears,  upon  demand,  a  non-utilization  fee  calculated  as the  following
specified  percentage of the difference between $25,000,000 (which amount shall
be subject to adjustment to reflect (A) any termination of Lessor=s  commitment
pursuant to the next  sentence,  or (B) any  reallocation  requested  by Lessee
pursuant to Section 5(e)(B) hereof) and the aggregate Capitalized Lessor=s Cost
of all Equipment  comprised of new tractors and trailers leased hereunder as of
the date of  determination  times  0.25  percent  with  respect  to the  period
commencing on the date on which Lessor initially funds the Capitalized Lessor=s
Cost  of any  unit  of the  Equipment  and  continuing  for  ninety  (90)  days
thereafter;  and 0.50 percent thereafter.  By written notice to Lessor,  Lessee
may  terminate  that  portion of Lessor=s  commitment  to acquire and lease new
tractors  and  trailers  hereunder  as has not then been  funded or as to which
Lessor has not then incurred contractual liability. (e) At all times during the
term of this Lease,  Lessee shall maintain a Fixed Charge Coverage Ratio of not
less  than  1.1:1.0,  determined  as of the  last  day of each  fiscal  quarter
calculated on a rolling four (4) - quarter basis. As used herein, AFixed Charge
Coverage  Ratio@  shall mean the ratio of (X)  Lessee=s  consolidated  earnings
before income taxes, depreciation and amortization,  minus non-financed capital
expenditures,  minus cash taxes paid by Lessee on a consolidated basis, divided
by (Y) principal  payments on indebtedness plus cash interest expense of Lessee
on a consolidated basis. All calculations hereunder shall be made in accordance
with GAAP.

         5. CONDITIONS  PRECEDENT.  Lessor's  obligations  under each Schedule,
including  its  obligation  to purchase  and lease any  Equipment  to be leased
thereunder,  are  conditioned  upon  Lessor's  determination  that  all  of the
following have been  satisfied:  (a) Lessor having  received the following,  in
form and substance  reasonably  satisfactory to Lessor:  (1) evidence as to due
compliance with the insurance  provisions  hereof;  (2) Uniform Commercial Code
financing  statements  and all  other  filings  and  recordings  as  reasonably
required by Lessor;  (3)  certificate  of Lessee's  Secretary  certifying:  (i)
resolutions  of  Lessee's  Board of  Directors  duly  authorizing  the sale and
leasing of the Equipment hereunder and the execution,  delivery and performance
of the Lease  Documents,  and (ii) the incumbency and signature of the officers
of Lessee  authorized to execute such documents;  (4) an opinion of counsel for
Lessee;  (5) the only manually executed original of the Equipment  Schedule and
executed  originals of all other Lease  Documents;  (6) all purchase  documents
pertaining to the Equipment  (collectively,  the "Supply  Contract"),  together
with  photocopies  of the  manufacturers'  statements of origin with respect to
each item of the Equipment and of the  applications  for  certificates of title
and lien notation  applications,  required to cause each  certificate  of title
issued with respect to an item of the Equipment to show the registered owner as
Lessor;  (7) such general and  collateral  releases from prior  lenders  and/or
lessors with respect to the  Equipment as Lessor  reasonably  may require;  (8)
such access to  Lessees=  management  and  auditors  as Lessor  reasonably  may
require;  (9)  substantiation  with  respect  to each  item  of the  Equipment,
including complete descriptions of the Equipment including make (manufacturer),
model number(s),  serial  number(s),  age,  original cost breakdown  (including
Ahard@ and Asoft@ cost), equipment specifications,  and to the extent available
or obtainable  (with respect to used tractors and trailers)  copies of original
purchase orders and invoices;  (10) an appraisal in form and substance,  and by
an  independent  appraiser,  reasonably  satisfactory  to  Lessor  and  Lessee,
substantiating  the Equipment=s  remaining  economic useful life, all requisite
fair  market  values,  and  orderly  liquidation  values,  at  selected  points
throughout  the term (such  appraisal to be provided by Lessee at its expense);
(11) such consents with respect to the  transaction  contemplated by this Lease
from Amsouth Bank as  reasonably  may be required  with respect to that certain
Advised  Revolving  Line of Credit  Agreement  dated as of December  18,  1997,
between  Amsouth  Bank and  Carroll  Fulmer & Company,  Inc.,  Carolina-Pacific
Distributors,  Inc.,  Capitol Warehouse,  Inc. and Services Express,  Inc.; and
(12) such other documents,  agreements,  instruments,  certificates,  opinions,
assurances,  as Lessor  reasonably  may require.  (b) All  representations  and
warranties  provided in favor of Lessor in any of the Lease  Documents shall be
true  and  correct  in all  material  respects  on the  effective  date of such
Schedule  with  the  same  effect  as  though  made as of such  date  (Lessee's
execution and delivery of the Schedule shall  constitute an  acknowledgment  of
the same).  (c) There shall be no default or Default  under the Schedule or any
other Lease Documents.  The Equipment shall have been delivered to and accepted
by Lessee, and shall be in the condition and repair required hereby; and on the
effective  date of the  Schedule,  Lessor shall have received good title to the
Equipment  to be  leased  thereunder,  free  and  clear of any  lien,  claim or
encumbrance  of any  kind.  (d)  There  shall  have  been (1) since the date of
Lessees= most recent audited financial statements,  no material adverse change,
individually or in the aggregate, in the business, financial or other condition
of the Lessees  taken as a whole,  or the  Equipment,  or in the  prospects  or
projections of the Lessees taken as a whole; (2) no litigation commenced which,
if successful,  would have a Material  Adverse Effect on the Lessees taken as a
whole,  or which would challenge the  transactions  contemplated by this Lease;
(3) since the date of Lessees= most recent  audited  financial  statements,  no
material increase in the liabilities,  liquidated or contingent, of the Lessees
taken as a whole,  or a  material  decrease  in the assets of any Lessee or the
Lessees taken as a whole; and (4) since the date of execution of this Lease, no
change in lease syndication,  financial or capital market conditions  generally
that  in  Lessor=s  judgment  would  materially   impair   syndication  of  the
transaction  contemplated by this Lease.  (e)  Notwithstanding  anything to the
contrary set forth  herein,  upon  completion  of all fundings  hereunder,  the
maximum aggregate  Capitalized  Lessor=s Cost of all of the Equipment comprised
of  trailers  shall  not  exceed:  (1)  forty  (40)  percent  of the  aggregate
Capitalized  Lessor=s  Cost of all  Equipment  comprised  of used  tractors and
trailers  funded  by  Lessor  hereunder;  and (2)  forty  (40)  percent  of the
aggregate  Capitalized Lessor=s Cost of all Equipment comprised of new tractors
and trailers funded by Lessor  hereunder;  unless (A), at such time, Lessor has
then  successfully  syndicated any such excess amount,  or (B) Lessee  notifies
Lessor of  Lessee=s  desire to  reallocate  an  amount up to  $10,000,000  from
Lessor=s commitment to acquire and lease used tractors and trailers to Lessor=s
commitment to acquire and lease new tractors and  trailers,  in which case such
percentages shall be revised.

         6.  DELIVERY;  INSPECTION  AND  ACCEPTANCE BY LESSEE.  Upon  delivery,
Lessee shall inspect and, to the extent the Equipment  conforms in all material
respects to the condition  required by the applicable  Supply Contract,  accept
the Equipment  and shall execute and deliver to Lessor a Schedule  containing a
complete description of the item of Equipment accepted;  whereupon,  as between
Lessor and Lessee,  the same shall be deemed to have been  finally  accepted by
Lessee  pursuant to this  Lease.  All  expenses  incurred  in  connection  with
Lessor's  purchase  of  the  Equipment   (including   shipment,   delivery  and
installation)  shall be the  responsibility  of  Lessee  and shall be paid upon
demand. If Lessee shall, for reasonable cause, refuse to accept delivery of any
item of the Equipment,  Lessee will be assigned all rights and shall assume all
obligations as purchaser of the Equipment.

         7. USE AND MAINTENANCE. (a) Lessee shall: (1) use the Equipment solely
in the Continental United States and Canada (provided, however, that use of any
item of the Equipment  outside the  Continental  United States shall not exceed
fifty (50)  percent of the total use of such item of the  Equipment  during any
calendar year),  and in the conduct of its business,  for the purpose for which
the  Equipment  was  designed,  in a careful and proper  manner,  and shall not
permanently discontinue use of the Equipment;  (2) operate,  maintain,  service
and repair the Equipment, and maintain all records and other materials relating
thereto, (i) in substantial compliance with (A) the Supplier's  recommendations
and all  maintenance  and  operating  manuals or service  agreements,  whenever
furnished or entered into, including any subsequent  amendments or replacements
thereof,  issued by the Supplier or service  provider,  (B) the requirements of
all applicable insurance policies,  (C) the Supply Contract,  so as to preserve
all of Lessee's and Lessor's  rights  thereunder,  including  all rights to any
warranties,   indemnities  or  other  rights  or  remedies,  (D)  all  material
applicable laws, and (E) the prudent practice of other similar companies in the
same  business as Lessee,  but in any event,  to no lesser  standard  than that
employed by Lessee for  comparable  equipment  owned or leased by it  (provided
that such maintenance  program shall be subject to review by Lessor and must be
reasonably satisfactory to Lessor); and (ii) without limiting the foregoing, so
as to cause the Equipment to be in good repair and  operating  condition and in
at least the same condition as when delivered to Lessee  hereunder,  except for
ordinary wear and tear  resulting  despite  Lessee's full  compliance  with the
terms hereof; (3) notify Lessor within thirty (30) days after the change of the
location of the principal  garage of any Equipment as specified in the Schedule
and promptly  notify Lessor in writing if any unit of Equipment fails to return
to the specified  location of the principal garage of such unit for a period of
ninety (90) consecutive days; (4) not attach or incorporate the Equipment to or
in any other  item of  equipment  in such a manner  that the  Equipment  may be
deemed  to  have  become  an  accession  to or a part  of  such  other  item of
equipment;  (5) cause each  principal  item of the Equipment to be  continually
marked, in a plain and distinct manner, with the name of Lessor followed by the
words "Owner and Lessor," or other  appropriate  words  designated by Lessor on
labels  furnished by Lessor;  (6) promptly  notify Lessor of any malfunction of
the  hubodometer  or  odometer  of any unit of  Equipment;  and (7) allow  only
qualified,  properly licensed personnel selected, employed and/or controlled by
Lessee to operate the  Equipment.  (b) Within a  reasonable  time,  Lessee will
replace any parts of the  Equipment  which  become worn out,  lost,  destroyed,
damaged beyond repair or otherwise  permanently  rendered unfit for use, by new
or  reconditioned  replacement  parts  which are free and  clear of all  liens,
encumbrances or rights of others and have a value, utility and remaining useful
life at least equal to the parts replaced.  Any modification or addition to the
Equipment  which is  required by law shall be made by Lessee,  at its  expense.
Title to all parts,  improvements  and additions to the  Equipment  immediately
shall vest in Lessor,  without cost or expense to Lessor or any further  action
by any other person, and such parts, improvements and additions shall be deemed
incorporated  in the  Equipment  and  subject  to the terms of this Lease as if
originally leased hereunder, if such parts are required by law or are otherwise
essential  to the  operation of the  Equipment  or cannot be detached  from the
Equipment without materially interfering with the operation of the Equipment or
adversely  affecting  the value,  utility and  remaining  useful life which the
Equipment  would have had without the addition  thereof.  Lessee shall not make
any material  alterations  (other than  repairs) to the  Equipment  without the
prior written consent of Lessor. (c) Upon two (2) business days= notice, Lessee
shall afford Lessor  access to the premises  where the Equipment is located for
the purpose of inspecting  such  Equipment and all  applicable  maintenance  or
other records at any reasonable time during normal  business  hours;  provided,
however, if a default or Default shall have occurred and then be continuing, no
notice of any inspection by Lessor shall be required.

         8.  DISCLAIMER  OF  WARRANTIES.  LESSOR IS NOT A SELLER,  SUPPLIER  OR
MANUFACTURER  (AS SUCH TERMS ARE  DEFINED  OR USED,  AS THE CASE MAY BE, IN THE
UNIFORM  COMMERCIAL  CODE), OR DEALER,  NOR A SELLER'S OR A DEALER'S AGENT. THE
EQUIPMENT  IS LEASED  HEREUNDER  "AS IS",  AND LESSOR HAS NOT MADE,  AND HEREBY
DISCLAIMS  LIABILITY  FOR, AND LESSEE HEREBY WAIVES ALL RIGHTS  AGAINST  LESSOR
RELATING TO, ANY AND ALL WARRANTIES, REPRESENTATIONS OR OBLIGATIONS OF ANY KIND
WITH RESPECT TO THE EQUIPMENT, EITHER EXPRESS OR IMPLIED, ARISING BY APPLICABLE
LAW OR OTHERWISE,  INCLUDING ANY OF THE SAME RELATING TO OR ARISING IN OR UNDER
(a)  MERCHANTABILITY  OR FITNESS FOR PARTICULAR  USE OR PURPOSE,  (b) COURSE OF
PERFORMANCE,  COURSE OF DEALING OR USAGE OR TRADE OR (c) TORT  (WHETHER  OR NOT
ARISING  FROM THE  ACTUAL,  IMPLIED OR IMPUTED  NEGLIGENCE  OF LESSOR OR STRICT
LIABILITY) OR THE UNIFORM COMMERCIAL CODE (INCLUDING ARTICLE 2A, AS HEREINAFTER
DEFINED;  AND,  WITHOUT LIMITING THE FOREGOING,  INCLUDING,  (i) ANY WARRANTIES
CONTAINED IN " 2A-210, 2A-211, 2A-212 AND 2A-213, (ii) ANY RIGHT TO DEEM LESSOR
IN DEFAULT  PURSUANT  THERETO,  AND (iii) ALL OF LESSEE'S  RIGHTS AND  REMEDIES
UNDER " 2A-508  THROUGH  2A-521) OR OTHER  APPLICABLE  LAW WITH  RESPECT TO THE
EQUIPMENT,  INCLUDING ITS TITLE OR FREEDOM FROM LIENS,  FREEDOM FROM TRADEMARK,
PATENT OR COPYRIGHT  INFRINGEMENT,  FREEDOM FROM LATENT DEFECTS (WHETHER OR NOT
DISCOVERABLE),  CONDITION,  MANUFACTURE,  DESIGN,  SERVICING OR COMPLIANCE WITH
APPLICABLE  LAW; it being  agreed that all such  risks,  as between  Lessor and
Lessee,  are to be borne by Lessee;  and Lessor's  agreement to enter into this
Lease and any  Schedule  is in  reliance  upon the  freedom  from and  complete
negation of liability or  responsibility  for the matters waived and disclaimed
herein.  Lessor is not  responsible  for any direct,  indirect,  incidental  or
consequential damage to or losses resulting from the installation, operation or
use of the  Equipment  or any products  manufactured  thereby.  All  assignable
warranties made by the Supplier to Lessor are hereby assigned to Lessee for and
during  the term of this Lease and Lessee  agrees to  resolve  all such  claims
directly  with the  Supplier.  Provided that no default or Default has occurred
and is then  continuing,  Lessor fully shall cooperate with Lessee with respect
to the resolution of such claims, in good faith and by appropriate  proceedings
at  Lessee's  expense.  Any such  claim  shall  not  affect in any  manner  the
unconditional obligation of Lessee to make rent payments hereunder.

         9. FEES AND TAXES.  If permitted  by law,  Lessee shall report and pay
promptly  all taxes,  fees and  assessments  due,  imposed,  assessed or levied
against  any  Equipment  (or  the  purchase,   ownership,   delivery,  leasing,
possession,  use or  operation  thereof),  this Lease (or any rents or receipts
hereunder), any Schedule, Lessor or Lessee by any governmental entity or taxing
authority during or related to the term of this Lease arising out of or related
to the Equipment,  this Lease, any rent or receipts hereunder, or any Schedule,
including,  without  limitation,  all license and  registration  fees,  and all
sales, use, personal property,  excise, stamp or other similar taxes,  imposts,
duties and charges,  together  with any  penalties,  fines or interest  thereon
(collectively ATaxes@). Lessee shall have no liability for Taxes (i) imposed by
the  United  States of America or any state or  political  subdivision  thereof
which are on or  measured  by the net income of Lessor  except as  provided  in
Sections  2(b) and 14(c),  (ii) imposed by the United  States of America or any
state or political  subdivision  thereof  which are based upon,  measured by or
with respect to gross income or receipts (unless such taxes are imposed in lieu
of a sales tax or personal  property tax for which  Lessee  would  otherwise be
required to indemnify  Lessor  hereunder),  items of tax  preference or minimum
tax, excess profits, capital,  franchises, net worth, capital gains, profits or
conduct of business or other similar Taxes (including,  without  limitation,  a
valued  added tax in the nature of an income  tax),  (iii) that are  penalties,
fines or interest  caused by any act or omission of Lessor  (unless such act or
omission of Lessor was caused by an act or omission of Lessee),  (iv) caused by
the willful misconduct or gross negligence of Lessor or the breach by Lessor of
any  provision of this Lease or any Schedule  (unless such breach by Lessor was
caused by an act or  omission of  Lessee),  (v) arising out of,  relating to or
measured  by acts,  omissions,  events or periods of time which occur after the
expiration or early  termination  of this Lease (unless such accrued during the
term of this Lease or relate to the  period  prior to the  expiration  or early
termination  of this  Lease),  or (vi)  that  become  payable  by reason of any
voluntary or  involuntary  transfer or disposition by Lessor of any interest in
any Equipment,  the Lease or any Schedule  (unless such transfer or disposition
occurs  after a  Default  hereunder  or is in  connection  with the sale of the
Equipment to Lessee or its affiliates).  Lessee shall promptly reimburse Lessor
for  any  Taxes  charged  to or  assessed  against  Lessor,  unless  Lessee  is
contesting  in good faith any such Taxes and such  contest will not result in a
material  risk of sale,  forfeiture or loss of, or the creation of any lien on,
any  Equipment.  Lessee shall show Lessor as the owner of the  Equipment on all
tax  reports or  returns,  and send  Lessor a copy of each report or return and
evidence of Lessee's payment of Taxes upon request.

         10. INTENT, TITLE AND LIENS. (a) The parties intend and agree that the
Equipment shall remain personal  property.  (b) It is the express  intention of
the parties hereto that (1) each Schedule, incorporating by reference the terms
of this Lease,  constitutes a true "lease" and a "finance  lease" as such terms
are defined in the Uniform  Commercial Code Article 2A - Leases  ("Article 2A")
(whether  or not  Article  2A is then in effect in the State) and not a sale or
retention of security  interest;  and (2) title to the  Equipment  shall at all
times  remain in Lessor,  and Lessee  shall  acquire  no  ownership,  property,
rights,  equity, or interest other than a leasehold interest,  solely as Lessee
subject to the terms and conditions  hereof.  If,  notwithstanding  the express
intent of the parties,  a court of competent  jurisdiction  determines that any
Schedule is not a true lease,  but is rather a sale and extension of credit,  a
lease intended for security,  a loan secured by the Equipment specified in such
Schedule,  or other similar arrangement,  the parties agree that in such event:
(i) (A) in order to secure the prompt  payment and  performance as and when due
of all of Lessee's  obligations (both now existing and hereafter arising) under
each such  Schedule,  Lessee  shall be deemed  to have  granted,  and it hereby
grants, to Lessor a first priority security interest in the following  (whether
now existing or  hereafter  created):  the  Equipment  leased  pursuant to such
Schedule and all replacements,  substitutions,  accessions,  and proceeds (cash
and  non-cash;  but  without  power of sale),  including  the  proceeds  of all
insurance  policies,  thereof,  and (B) Lessee  agrees that with respect to the
Equipment,  in addition to all of the other  rights and  remedies  available to
Lessor hereunder upon the occurrence of a Default, Lessor shall have all of the
rights and remedies of a first  priority  secured party under the UCC; and (ii)
(A) the principal amount of any such obligation shall be an amount equal to the
aggregate Capitalized Lessor=s Cost of all Equipment,  (B) the term of any such
obligation  shall be the same as the term  specified for such  Equipment in the
related  Schedule,  (C) the  payments  under any such  obligation  shall be the
regular installments of rent specified in the Schedule for such Equipment,  and
(D) any such  obligation  shall  be at an  interest  rate  that is equal to the
lesser of the maximum  lawful rate permitted by applicable law or the effective
interest rate calculated on the basis of the foregoing  principal amount,  term
and payments as if the principal  amount were fully  amortized over the term of
the obligation. For purposes of this sub-part (b), this Lease, the Schedule, or
a photocopy of either thereof may be filed as a financing  statement  under the
UCC.  (c) Lessee may not dispose of any of the  Equipment  except to the extent
expressly provided herein,  notwithstanding the fact that proceeds constitute a
part of the Equipment. (d) Lessee further agrees to maintain the Equipment free
from all  claims,  liens,  attachments,  rights of others  and legal  processes
("Liens")  of creditors  of Lessee or any other  persons,  other than Liens for
fees, taxes,  levies,  duties or other governmental  charges of any kind, Liens
created by actions of the Lessor,  Liens of mechanics,  materialmen,  laborers,
employees or suppliers  and similar  Liens arising by operation of law incurred
by  Lessee  in the  ordinary  course  of  business  for  sums  that are not yet
delinquent  or  are  being  contested  in  good  faith  by  negotiations  or by
appropriate   proceedings  which  suspend  the  collection  thereof  (provided,
however,  that such  proceedings  do not  involve  any  substantial  danger (as
determined in Lessor's sole reasonable  discretion) of the sale,  forfeiture or
loss of the Equipment or any interest therein).  Lessee will defend, at its own
expense,  Lessor's  title to the  Equipment  from such  claims,  Liens or legal
processes.  Lessee shall also notify Lessor  immediately upon receipt of notice
of any Lien affecting the Equipment in whole or in part.

         11.  INSURANCE.   Each  Lessee  shall  obtain  and  maintain  all-risk
insurance  coverage with respect to that portion of the  Equipment  operated by
such Lessee insuring against,  among other things:  collision and comprehensive
coverage,  including loss or damage due to fire and the risks normally included
in extended coverage,  malicious mischief and vandalism,  for not less than the
greater of the full replacement  value or the Stipulated Loss Value (as defined
in Section 12 hereof);  and public liability coverage,  including both personal
injury and property  damage with a combined  single limit per occurrence of not
less than the amount specified in the Schedule,  with a reasonable  deductible.
All said insurance  shall be in form  (including all  endorsements  required by
Lessor) and amount and with companies  reasonably  satisfactory to Lessor.  All
insurance  for loss or damage  shall  provide  that  losses,  if any,  shall be
payable to Lessor as loss payee and Lessee  shall  utilize its best  efforts to
have all checks  relating  to any such  losses  delivered  promptly  to Lessor.
Lessor  shall  be named  as an  additional  insured  with  respect  to all such
liability  insurance.  Lessee  shall pay the  premiums  therefor and deliver to
Lessor evidence satisfactory to Lessor of such insurance coverage. Lessee shall
cause to be provided to Lessor,  not less than  fifteen  (15) days prior to the
scheduled expiration or lapse of such insurance coverage, evidence satisfactory
to Lessor of renewal or  replacement  coverage.  Each insurer  shall agree,  by
endorsement  upon  the  policy  or  policies  issued  by it  or by  independent
instrument  furnished to Lessor, that (a) it will give Lessor thirty (30) days'
prior  written  notice of the  effective  date of any  material  alteration  or
cancellation of such policy;  and (b) insurance as to the interest of any named
additional  insured or loss payee other than Lessee shall not be invalidated by
any actions,  inactions,  breach of warranty or  conditions  or  negligence  of
Lessee or any person other than Lessor with respect to such policy or policies.
The proceeds of such insurance  payable as a result of loss of or damage to the
Equipment shall be applied as required by the provisions of Section 12 hereof.

         12.  LOSS  AND  DAMAGE.   Lessee   assumes  the  risk  of  direct  and
consequential  loss and  damage to the  Equipment  from all  causes.  Except as
provided in this Section for discharge  upon payment of Stipulated  Loss Value,
no loss or damage to the  Equipment or any part thereof shall release or impair
any obligations of Lessee under this Lease. Lessee agrees that Lessor shall not
incur  any  liability  to Lessee  for any loss of  business,  loss of  profits,
expenses,  or any other Claims  resulting to Lessee by reason of any failure of
or delay in  delivery  or any delay  caused by any  non-performance,  defective
performance,  or  breakdown of the  Equipment,  nor shall Lessor at any time be
responsible  for  personal  injury  or the  loss or  destruction  of any  other
property  resulting from the  Equipment.  In the event of loss or damage to any
item of  Equipment  which  does not  constitute  a Total  Loss (as  hereinafter
defined),  Lessee  shall,  at its sole cost and  expense,  promptly  repair and
restore  such item of the  Equipment to the  condition  required by this Lease.
Provided  that no default or  Default  has  occurred  and is  continuing,  upon
receipt of evidence  reasonably  satisfactory  to Lessor of  completion of such
repairs,  Lessor will apply any net  insurance  proceeds  received by Lessor on
account of such loss to the cost of repairs.  Upon the occurrence of the actual
or  constructive  total  loss  of any  item  of  the  Equipment,  or the  loss,
disappearance,  theft or  destruction of any item of the Equipment or damage to
any  item  of the  Equipment  to such  extent  as  shall  make  repair  thereof
uneconomical  or shall render any item of the Equipment  permanently  unfit for
normal  use for  any  reason  whatsoever,  or the  condemnation,  confiscation,
requisition, seizure, forfeiture or other taking of title to or use of any item
of the  Equipment or the  imposition  of any Lien  thereon by any  governmental
authority (as established to the reasonable  satisfaction  of Lessor;  any such
occurrence being herein referred to as a "Total Loss"), during the term of this
Lease, Lessee shall give prompt notice thereof to Lessor.  Within five (5) days
after the  receipt  of the  insurance  proceeds  or ninety  (90) days after the
occurrence  of a Total  Loss,  Lessee  shall pay to Lessor the rent due on that
date plus the Stipulated  Loss Value of the item or items of the Equipment with
respect to which the Total Loss has occurred  and any other sums due  hereunder
with respect to that  Equipment  (less any insurance  proceeds or  condemnation
award actually paid).  Upon making such payment,  this Lease and the obligation
to make future  rental  payments  shall  terminate  solely with  respect to the
Equipment or items  thereof so paid for.  Lessor shall deliver to Lessee a bill
of sale transferring and assigning to Lessee without recourse or warranty,  all
of Lessor's right,  title and interest in and to such  Equipment.  Lessor shall
not be required to make and may  specifically  disclaim any  representation  or
warranty as to the condition of the Equipment or any other matters.  As used in
this Lease,  "Stipulated  Loss Value" shall mean the product of the Capitalized
Lessor=s Cost (designated on the appropriate Schedule) of the Equipment and the
applicable  percentage  factor set forth on the  Schedule  of  Stipulated  Loss
Values  attached to the Schedule.  Stipulated Loss Value shall be determined as
of the next  date on which a  payment  of rent is or would be due after a Total
Loss or other termination of an Schedule, after payment of any rent due on such
date,  and the  applicable  percentage  factor shall be that which is set forth
with respect to such rent  payment.  After payment of the final payment of rent
due under the original  term of this Lease and during any renewal term thereof,
Stipulated Loss Value shall be determined as of the date of termination of such
Schedule (absent any renewal thereof) or, if during a renewal term, on the next
date on which a payment  of rent is or would be due after a Total Loss or other
termination  of such renewal term,  after payment of any rent due on such date,
and the applicable  percentage  factor shall be the last percentage  factor set
forth on the Schedule of Stipulated Loss Values attached to such Schedule.

         13. REDELIVERY. Upon the expiration or earlier termination of the term
of any Schedule (or of any holdover  with respect to an item of  Equipment,  if
applicable),  Lessee shall, at its own expense,  return the Equipment to Lessor
within  ten (10) days (a) in the same  condition  as when  delivered  to Lessee
hereunder,  ordinary wear and tear resulting from proper use thereof  excepted,
(b) in such  operating  condition as is capable of  performing  its  originally
intended  use,  (c) having  been  used,  operated,  serviced  and  repaired  in
accordance with, and otherwise  complying with,  Section 7 hereof, (d) free and
clear of all Liens whatsoever except Liens resulting from claims against Lessor
not  relating  to the  ownership  of such  Equipment,  and (e)  satisfying  the
following conditions (as applicable):

         (1)  With  respect  to each  item  of the  Equipment  comprised  of an
over-the-road tractor:

         (i) Tires: All tires shall be of the same type, tread and design as on
the Basic  Term  Commencement  Date,  have a minimum  remaining  depth of 10/32
inches and shall not be out of round or  demonstrate  any uneven wear  pattern.
All front tires shall be original casings with no cross lugs. Rear tires may be
either original casings or first time recapped casings.

         (ii) Mileage:  Average  annual mileage shall not exceed 125,000 miles.
Should mileage exceed this limit,  Lessee agrees to pay a mileage  surcharge of
four cents  ($0.04) per mile for each excess mile.  All mileage  determinations
shall be based  upon  hubodometer  readings  or,  in the  absence  thereof,  by
odometer readings.

         (iii)  Mechanical  Power Train:  (A) Each unit of Equipment shall have
passed a dynamometer test, road test and oil analysis,  each conducted not more
than sixty (60) days prior to the  return of the  Equipment,  the test  results
shall have been  provided to Lessor not more than two (2) weeks after each test
has been  conducted  and not less than two (2) weeks prior to the return of the
Equipment and the tests and test results shall have been reasonably  acceptable
to Lessor,  (B) there shall be no cracked cylinder heads or engine blocks,  (C)
the engine  output  shall be at least  ninety  (90)  percent of its  horsepower
without  excess  blow-by,  exhaust  system  leakage  or oil  leakage,  (D)  the
transmission  and rear axles  shall be  capable of pulling  loads to their full
rated capacity, (E) there shall be no transmission, drive axle or wheel hub oil
leaks, and (vi) there shall be no slipping or grabbing clutch.

         (iv) General  Condition:  With respect to each unit, no glass shall be
materially  broken,  chipped or cracked,  no upholstery shall have any material
cut, tear or burn, there shall be no unrepaired  material damage to exterior or
interior  materials  that  exceeds  $250  and  all  decals,  numbers,  customer
identification,  glue and adhesives  shall have been removed from the Equipment
without damage to paint or the Equipment. Cooling and lubrication systems shall
not be contaminated and there shall be no leaking between  systems,  no battery
shall have any dead cell,  cracked case or be  inoperative,  all brake  linings
shall  have at least  10/32  inches  remaining  wear and no brake drum shall be
cracked.

         (v) Documents  and Records:  Upon return of the  Equipment,  each unit
shall  meet  applicable  ICC  requirements  and,  if  applicable,  have a state
inspection  certificate  valid for at least ninety (90) days, shall have passed
applicable DOT inspections and shall have a current DOT certificate, shall have
proof of payment of any  applicable ad valorem tax, shall have all tax receipts
including  Federal  Highway Use Tax Form 2290 and  Schedule I, and shall have a
copy of the vehicle maintenance packet.

         (2)  With  respect  to each  item  of the  Equipment  comprised  of an
over-the-road trailer:

         (i) Specifications.  Upon return, each unit of Equipment must meet all
of the manufacturer=s specifications for performance under full-rated loads.

         (ii)  Trailer:  Upon  surrender of the  Equipment  at lease  maturity,
Lessee  shall remove all decals,  numbers,  customer  identification,  glue and
adhesives from the Equipment  without damage to the Equipment.  Equipment shall
have no  unrepaired  physical  damage and shall show no signs of abuse,  either
internal or  external.  All repairs  shall have been  performed  to  acceptable
industry  standards.  Trailers  shall  be  clean  and  show no  signs  of cargo
contamination.

         (iii) (A) Body:  There shall be no damaged,  bent or  unsecured  frame
members,  cross-members,  top or bottom rails, nose rails or rear header.  Rear
doors shall be  operational  and be able to close and lock  securely.  Enclosed
trailers shall be water tight.  There shall be no broken floor boards or gouges
in the floor to exceed one-quarter inch (.25"). Landing gears shall not be bent
and shall be operational in both high and low gears. If so equipped,  the bogie
shall  slide  freely  and lock into all  positions.  All  equipment  originally
supplied  with the trailer shall be secured and freely  operational,  including
manifest box, hazard placards,  etc. If so equipped,  there shall be no damaged
plywood liners, scuff liners, cargo securing devices or body vents.

                  (B)  FRP  Bodies  Only:  There  shall  be  no  de-lamination,
blistering or exposed wood on the FRP panels of the trailer.

                  (C) Refrigeration: If so equipped,  refrigeration units shall
be  fully   functional   and  able  to  perform   within   the   manufacturer=s
specifications,  including  (but not limited to)  cooling  capacity,  operating
temperature  and oil  pressure.  There shall be no excessive oil blow-by and no
cross-contamination  of systems (i.e. oil in cooling system, etc.) Refrigerants
must be fully charged with no leaks. Units shall cycle properly. All electrical
systems must be fully operational.

         (iv) Tires:  Tires shall be of matched generic type,  tread and design
as originally  supplied and have at least 10/32 inches  remaining  tread depth.
First time recapped casings are acceptable for tires.  Tires will not be out of
round or have excessive wear caused by improper  inflation or alignment.  There
shall be no cuts or gouges in tread or sidewalls.

         (v)  Cargo  Tanks/Overflow/Holding/Storage   Tanks:  Lessee  shall  be
responsible  for  removing  all  cargo/fluids  from  tanks in  accordance  with
prevailing waste disposal laws and  regulations.  Sumps and tanks must be clean
and dry.

         (vi) Hydraulic  Equipment:  All hydraulic  pumps,  cylinders and hoses
must be fully operational at rated capacity with no leaks.

         (vii)  Brakes:  Brakes  linings shall have at least fifty (50) percent
remaining  wear.   Brake  drums  shall  not  be  cracked,   damaged  or  exceed
manufacturer=s  recommended  wear  limits.  There  shall be no air leaks in the
braking system.

         (viii) Documents and Records: Upon return of the Equipment,  each unit
shall  meet  applicable  ICC  requirements  and,  if  applicable,  have a state
inspection certificate valid for at least one hundred twenty (120) days.

         (3) With respect to each item of the Equipment:

         (i) Roadworthy: Each unit shall be clean and in good appearance and in
roadworthy  condition,  and all original  equipment or  substantial  equivalent
thereof  shall be intact  and in proper  working  condition,  free of  physical
damage and mechanical problems.

         (ii)     Inspections:

                  (A) Not more than  ninety  (90)  days  prior to return of the
Equipment,  during  regular  working  hours,  Lessee  must  make the  Equipment
available  to  Lessor  or  Lessor=s  agent  so  walk-around  appraisals  can be
conducted.

                  (B) Testing and appraisal  with necessary  reconditioning  to
meet acceptable surrender conditions are to be provided to Lessor two (2) weeks
prior to turn-in.

         Lessee shall  return the  Equipment  by  delivering  it to such places
within the Continental  United States as Lessor  reasonably  shall specify.  In
addition to Lessor's other rights and remedies  hereunder,  if the Equipment is
not  returned in a timely  fashion,  or if repairs are  necessary  to place any
items of  Equipment in the  condition  required in this  Section,  Lessee shall
continue to pay to Lessor per diem rent at the last prevailing lease rate under
the applicable Schedule with respect to such items of Equipment, for the period
of delay in  redelivery,  or for the  period of time  reasonably  necessary  to
accomplish such repairs together with the cost of such repairs,  as applicable.
Lessor's  acceptance  of such rent on account of such delay or repair  does not
constitute  a  renewal  of the term of the  related  Schedule  or a  waiver  of
Lessor's right to prompt return of the Equipment in proper condition.

         14. INDEMNITY. (a) Lessee assumes and agrees to indemnify,  defend and
keep harmless Lessor, and any assignee of Lessor's rights,  obligations,  title
or interests under any Schedule, its agents and employees ("Indemnitees"), from
and against any and all Claims (as hereinafter defined) (other than such as may
directly  and  proximately  result  from a breach  of the  Lease  Documents  or
material  violation of  applicable  law by Lessor,  or the gross  negligence or
willful misconduct of, such Indemnitees),  by paying (on an after-tax basis) or
otherwise discharging same, when and as such Claims shall become due, including
Claims arising on account of (1) any Lease Document,  or (2) the Equipment,  or
any part thereof, including the ordering,  acquisition,  delivery, installation
or rejection of the Equipment,  the possession,  maintenance,  use,  condition,
ownership or operation of any item of Equipment,  and by whomsoever owned, used
or  operated,  during  the term of any  Schedule  with  respect to that item of
Equipment,   the  existence  of  latent  and  other  defects  (whether  or  not
discoverable by Lessor or Lessee) any claim in tort for negligence  (other than
Lessor=s negligence) or strict liability,  and any claim for patent,  trademark
or copyright infringement,  or the loss, damage, destruction,  removal, return,
surrender,  sale or other disposition of the Equipment, or any item thereof, or
for whatever other reason whatsoever (other than the items excluded herein). It
is the express intention of both Lessor and Lessee, that the indemnity provided
for in this  Section  includes  Claims for which the  Indemnitees  are strictly
liable.  Lessor shall give Lessee prompt notice of any Claim hereby indemnified
against and Lessee shall be entitled to control the defense and any  settlement
thereof,  so long as no default or Default has occurred and is then continuing;
provided,  however, that Lessor shall have the right to approve defense counsel
selected by Lessee which approval will not be  unreasonably  withheld.  For the
purposes of this Lease,  the term "Claims" shall mean all claims,  allegations,
harms,  judgments,  good faith settlements entered into, suits, actions, debts,
obligations,  damages (whether  incidental,  consequential or direct),  demands
(for  compensation,  indemnification,   reimbursement  or  otherwise),  losses,
penalties, fines, liabilities (including strict liability), charges that Lessor
has incurred or for which it is responsible,  in the nature of interest, Liens,
and costs (including  attorneys' fees and  disbursements and any other legal or
non-legal  expenses of  investigation  or defense of any Claim,  whether or not
such  Claim is  ultimately  defeated  or  enforcing  the  rights,  remedies  or
indemnities provided for hereunder,  or otherwise available at law or equity to
Lessor),  of  whatever  kind or nature,  contingent  or  otherwise,  matured or
unmatured, foreseeable or unforeseeable, by or against any person.

                  (b) Lessee hereby represents, warrants and covenants that (i)
on the  Lease  Commencement  Date for any unit of  Equipment,  such  unit  will
qualify  for all of the  items of  deduction)  (specified  in  Section C of the
applicable  Schedule  (ATax  Benefits@) in the hands of Lessor,  and (ii) at no
time during the term of this Lease will  Lessee take or omit to take,  nor will
it  permit  any  sublessee  or  assignee  to take or omit to take,  any  action
(whether  or not such act or omission is  otherwise  permitted  by Lessor or by
this Lease), which will result in the disqualification of any Equipment for, or
recapture  of, all or any  portion of such Tax  Benefits  other than any action
that is required by the terms of this Lease.

                  (c) If (1)  nationally  recognized  independent  tax  counsel
selected and  compensated by Lessor shall determine that there is no reasonable
basis for Lessor to claim on its  Federal  income tax return all or any portion
of the Tax  Benefits  with  respect to any  Equipment,  or (2) any Tax  Benefit
claimed on the Federal income tax return of Lessor is disallowed or adjusted or
required to be recaptured by the Internal Revenue Service,  or (3) Lessor shall
become  liable  for  additional  tax as a  result  of  Lessee  having  added an
attachment  or  made  an  alteration  to  the  Equipment,   including  (without
limitation)  any  such  attachment  or  alteration  which  would  increase  the
productivity  or capability of the Equipment so as to violate the provisions of
Rev. Proc.  75-21,  1975-1 C.B. 715, or Rev. Proc.  79-48,  1979-2 C.B. 529 (as
either or both may hereafter be modified or superseded), or (4) Lessor shall be
entitled to claim a lesser credit for foreign taxes against its Federal  income
tax  liability  than that to which Lessor would have been entitled if each item
of income,  gain,  loss and  deduction  with respect to the  Equipment had been
treated as income from sources within the United States pursuant to Section 861
of the Code (any determination,  disallowance,  adjustment or recapture being a
ALoss@),  then Lessee shall pay to Lessor,  as an indemnity  and as  additional
rent, an amount that shall cause Lessor's  after-tax  economic  yields and cash
flows to equal the Net Economic  Return that would have been realized by Lessor
if such  Loss had not  occurred.  Such  amount  shall be  payable  upon  demand
accompanied  by a statement  describing in reasonable  detail such Loss and the
computation of such amount.  Within ten (10) days following Lessee=s receipt of
such  computations,  Lessee may  request  that a ABig 6@  accounting  firm (the
AAccounting  Firm@) verify that such computations are  mathematically  accurate
and are based on the same assumptions,  including tax assumptions, as were used
by Lessor in pricing this  transaction.  The Accounting Firm shall be requested
to make its  determination  within  twenty-five (25) days, which  determination
shall be binding and conclusive upon Lessor and Lessee. Lessor shall provide to
the Accounting Firm on a confidential  basis all information  (including access
to any computer  programs used by Lessor with respect to this  transaction  and
the   determination  of  the  Tax  Benefit)   reasonably   necessary  for  such
determination.  All fees and expenses  payable to the Accounting  Firm shall be
borne by Lessee  unless  such  determination  shall  disclose  an error made by
Lessor in favor of Lessor  exceeding  $50,000 in the  aggregate,  in which case
such fees and expenses  shall be paid by Lessor.  The economic  yields and cash
flows shall be computed on the same  assumptions,  including  tax rates as were
used  by  Lessor  in  originally  evaluating  the  transaction  (ANet  Economic
Return@).  If an adjustment has been made under Section 2(b) then the Effective
Rate used in the next preceding adjustment shall be substituted.

                  (d)  Notwithstanding  anything to the contrary in this Lease,
Lessee shall not be required to indemnify  Lessor for any Loss that occurs as a
result of one or more of the following: (i) the failure of Lessor to claim in a
timely and proper  manner any of the Tax Benefits  (other than by reason of any
act or omission  of Lessee  which is not  required  of Lessee  pursuant to this
Lease);  (ii) a voluntary or  involuntary  disposition  by Lessor of all or any
part of its interest in this Lease or any  Equipment  (unless such  disposition
occurs after a Default hereunder);  (iii) any event as a result of which Lessee
has paid  Stipulated  Loss Value or Termination  Value to or for the benefit of
Lessor;  (iv) the failure by Lessor to timely contest (in  accordance  with the
provisions of Section 14(e) hereof) a claim by the Internal  Revenue Service (a
AClaim@)  that, if  sustained,  would result in a Loss (other than by reason of
any act or omission of Lessee which is not required of Lessee  pursuant to this
Lease); (v) the failure of Lessor to have sufficient taxable income for Federal
income tax  purposes  against  which to  benefit  from the Tax  Benefits;  (vi)
application  of the provisions of Section 55 through 59A of the Code to Lessor;
(vii) the failure of this Lease to be treated as a Atrue lease@ or Lessor to be
considered  the owner of the Equipment for Federal  income tax purposes  (other
than by reason of any act or omission of Lessee which is not required of Lessee
pursuant  to  this   Lease);   (viii)  any   amendment  to  or  change  in  the
interpretation of the Code or regulations issued thereunder enacted,  issued or
promulgated after the effective date of this Lease; (ix) the application of the
Amid-quarter  convention@  (within the meaning of Section  168(d)(4)(C)  of the
Code) to Lessor; (x) the status of Lessor for Federal income tax purposes - for
example, Lessor=s status as a Atax-exempt entity@ within the meaning of Section
168(h)(2) of the Code, an S corporation, a partnership, a utility, an insurance
company or a person that is not a AUnited  States person@ within the meaning of
Section  7701(a)(30)  of  the  Code;  (xi)  the  gross  negligence  or  willful
misconduct  of Lessor or the  breach by Lessor of any  provision  of this Lease
(unless  such act or  omission  of Lessor was caused by an act or  omission  of
Lessee  which is not required of Lessee  pursuant to this Lease);  or (xii) any
amendment  to this  Lease or any  Schedule  unless  Lessee  has given its prior
written consent to such amendment.

                  (e) Within thirty (30) days of its receipt of a Claim, Lessor
shall notify  Lessee in writing of such Claim.  Upon written  request of Lessee
made within  fifteen  (15) days of receipt by Lessee of notice from Lessor of a
Claim,  Lessor  shall  contest in good  faith  (and  shall not  settle  without
Lessee=s written consent) such Claim; provided, however, that: (i) Lessor shall
not be  obligated  to contest  such  Claim  unless,  within  sixty (60) days of
receipt by Lessee of notice from Lessor of such Claim, Lessee furnished Lessor,
at Lessee=s  expense,  with an opinion of independent  tax counsel  selected by
Lessee and reasonably acceptable to Lessor that there is a reasonable basis for
contesting such Claim; (ii) Lessor shall not be obligated to take any action to
contest such Claim unless Lessee reimburses Lessor on demand for all reasonable
costs and expenses that Lessor incurs in connection with contesting such Claim;
(iii)  Lessor  shall not be  obligated  to pursue  an appeal  from any  adverse
decision  of any court  with  respect to such Claim  unless  Lessee  shall have
timely (A) furnished Lessor, at Lessee=s expense, an opinion of independent tax
counsel  selected by Lessee and  reasonably  acceptable to Lessor to the effect
that there is a meritorious  basis for contesting such adverse decision and (B)
posted any bond or other  security  required  by law for  pursuing  such appeal
(which appeal,  in no event,  shall be required to be made to the United States
Supreme  Court);  (iv) Lessor  shall not be obligated to contest or continue to
contest  such  Claim  if a  Default  under  this  Lease  has  occurred  and  is
continuing; and (v) Lessor may at any time terminate the contest of such Claim,
in which case  Lessee  shall have no further  obligation  to  indemnify  Lessor
hereunder with respect to such Claim.

                  (f) If Lessor receives a refund or credit of all or a part of
any amount paid by Lessee with respect to a Loss, Lessor shall pay to Lessee an
amount  equal to the sum of the  amount of such  refund or credit  received  by
Lessor,  plus any interest  attributable  to any such refund or credit actually
received by Lessor.

                  (g) In  calculating  the amount of any  indemnity  payable by
Lessee  with  respect to a Loss,  Lessor  shall take into  account  any credit,
deduction  or other tax  benefit  realized  by Lessor  that would not have been
realized by Lessor had such Loss not occurred.

                  (h) All  references  to Lessor  in this  Section  14  include
Lessor and the consolidated  taxpayer group of which Lessor is a member. All of
Lessor's rights,  privileges and indemnities contained in this Section 14 shall
survive  the  expiration  or  other  termination  of this  Lease.  The  rights,
privileges and indemnities  contained herein are expressly made for the benefit
of, and shall be enforceable by Lessor, its successors and assigns.

         15. DEFAULT.  (a) A default shall be deemed to have occurred hereunder
and under an Schedule  ("Default") if (1) Lessee shall fail to make any payment
of rent  hereunder  or under an  Schedule  within  ten (10) days after the same
shall have  become  due; or (2) Lessee  shall fail to obtain and  maintain  the
insurance  required herein;  or (3) Lessee shall fail to perform or observe any
other covenant,  condition or agreement to be performed or observed by it under
any Lease Document and such failure shall  continue  unremedied for a period of
thirty  (30) days  after the  earlier of (i)  actual  knowledge  thereof by any
officer of Transit  Group,  Inc., or (ii) written  notice  thereof to Lessee by
Lessor;  or (4)  Lessee  shall (i) be  generally  not  paying its debts as they
become due; or (ii) take action for the purpose of invoking the  protection  of
any  bankruptcy or insolvency  law, or any such law is invoked  against or with
respect to Lessee or its property,  and any such petition  filed against Lessee
is not dismissed within sixty (60) days; or (5) Lessee shall make or permit any
unauthorized  Lien  against,  or  assignment  or transfer  of,  this  Lease,  a
Schedule,  the  Equipment,  or  any  interest  therein;  or  (6)  any  material
certificate, statement,  representation,  warranty or audit contained herein or
furnished  with respect  hereto by or on behalf of Lessee  proving to have been
false at the time as of which  the  facts  therein  set  forth  were  stated or
certified,  or  having  omitted  any  substantial  contingent  or  unliquidated
liability or Claim against Lessee;  or (7) Lessee shall be in default under any
material  obligation  for borrowed  money,  for the deferred  purchase price of
property or any lease  agreement,  and the applicable grace period with respect
thereto  shall have  expired,  which in any case would have a Material  Adverse
Effect;   or  (8)  Lessee  shall  have  terminated  its  corporate   existence,
consolidated with, merged into, or conveyed or leased  substantially all of its
assets as an entirety to any person  other than another  Lessee  (such  actions
being  referred to as an "Event"),  unless not less than thirty (30) days prior
to such Event:  (i) such person  executes  and  delivers to Lessor an agreement
satisfactory  in  form  and  substance  to  Lessor,  in  its  sole  discretion,
containing  such  person's  effective  assumption,  and its  agreement  to pay,
perform, comply with and otherwise be liable for, in a due and punctual manner,
all of Lessee's  obligations  having  previously  arisen, or then or thereafter
arising, under any and all of the Lease Documents; and (ii) Lessor is satisfied
as to the  creditworthiness of such person, and as to such person's conformance
to the other standard  criteria then used by Lessor for such  purposes;  or (9)
Carolina-Pacific   Distributors,   Inc.,  Certified  Transport,  Inc.,  Rainbow
Trucking Services,  Inc.,  Transit Leasing,  Inc. f/k/a Capitol Warehouse Inc.,
Transportation  Resources and Management,  Inc., Carroll Fulmer & Co., Inc., KJ
Transportation,  Inc., Service Express,  Inc.,  Diversified Trucking Corp., J&L
Truck Leasing of Farmington, Inc. and Northstar Transportation, Inc., or any of
them,  cease to be a  wholly-owned  subsidiary of Transit  Group,  Inc.  unless
merged into  another  Lessee;  or (10) as a result of or in  connection  with a
change in the ownership of fifty-one  (51) percent or more of the capital stock
of  Transit  Group,  Inc.,  the  ratio of  Consolidated  Total  Liabilities  to
Consolidated  Tangible Net Worth of Transit Group, Inc. equals or exceeds twice
the ratio of Consolidated Total Liabilities to Consolidated  Tangible Net Worth
of Transit Group, Inc. as of the date of this Lease,  without the prior written
consent of Lessor.  As used  herein,  AConsolidated  Tangible  Net Worth@ shall
mean, on a consolidated basis of Transit Group, Inc. and its subsidiaries,  the
excess  of all  assets  (including  the sum of the par or  stated  value of all
outstanding  capital  stock,  surplus and undivided  profits,  less any amounts
attributable  to goodwill,  patents,  copyrights,  mailing  lists,  catalogues,
trademarks,  bond discount and underwriting expenses,  organization expense and
other  intangibles)  over  all  liabilities,  as  determined  and  computed  in
accordance with GAAP; and  AConsolidated  Total  Liabilities@  shall mean, on a
consolidated   basis  of  Transit  Group,  Inc.  and  its  subsidiaries,   such
liabilities  which, in accordance with GAAP, would be included on the liability
side of a  consolidated  balance  sheet.  (b) The  occurrence of a Default with
respect to any Schedule shall,  at the sole discretion of Lessor,  constitute a
Default  with  respect  to any or all  Schedules  to  which it is then a party.
Notwithstanding  anything set forth herein,  Lessor may exercise all rights and
remedies hereunder independently with respect to each Schedule.

         16. REMEDIES.  (a) After a Default,  at the request of Lessor,  Lessee
shall comply with the  provisions of Section  10(a).  Lessee hereby  authorizes
Lessor to  peacefully  enter any premises  where any  Equipment may be and take
possession of the  Equipment.  Lessee shall  immediately  pay to Lessor without
further  demand  as  liquidated  damages  for  loss of a  bargain  and not as a
penalty, the Stipulated Loss Value of the Equipment  (calculated as of the rent
date next preceding the  declaration of default),  and all rents and other sums
then due under this Lease and all Schedules. Lessor may cancel this Lease as to
any or all of the  Equipment.  A  cancellation  shall  occur only upon  written
notice by Lessor to Lessee and only as to the units of  Equipment  specified in
any such notice.  Lessor may,  but shall not be required to, sell  Equipment at
private or public  sale,  in bulk or in parcels,  with or without  notice,  and
without having the Equipment present at the place of sale. Lessor may also, but
shall not be required to, lease,  otherwise dispose of or keep idle all or part
of the Equipment.  The proceeds of sale,  lease or other  disposition,  if any,
shall  be  applied  in the  following  order of  priorities:  (1) to pay all of
Lessor's costs,  charges and expenses  incurred in taking,  removing,  holding,
repairing and selling,  leasing or otherwise disposing of Equipment;  then, (2)
to the extent not  previously  paid by Lessee,  to pay Lessor all sums due from
Lessee under this Lease;  then (3) to  reimburse to Lessee any sums  previously
paid by Lessee as liquidated damages;  and (4) any surplus shall be retained by
Lessor.  Lessee shall  immediately  pay any  deficiency  in Clauses (1) and (2)
above.

                  (b) The  foregoing  remedies are  cumulative,  and any or all
thereof  may be  exercised  instead  of or in  addition  to each  other  or any
remedies at law, in equity,  or under statute.  Lessee waives notice of sale or
other disposition (and the time and place thereof), and the manner and place of
any advertising.  Lessee shall pay Lessor's actual  attorney's fees incurred in
connection with the enforcement, assertion, defense or preservation of Lessor's
rights and remedies under this Lease,  or if prohibited by law, such lesser sum
as may be  permitted.  Waiver of any default shall not be a waiver of any other
or subsequent default.

                  (c)  Any  default  under  the  terms  of  this  or any  other
agreement  between  Lessor and Lessee may be declared by Lessor a default under
this and any such other agreement.

         17. ASSIGNMENT. (a) WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR (WHICH
SHALL NOT  UNREASONABLY  BE  WITHHELD),  LESSEE  WILL NOT  ASSIGN,  TRANSFER OR
ENCUMBER ANY OF ITS RIGHTS OR OBLIGATIONS  HEREUNDER OR UNDER ANY Schedule,  OR
ITS LEASEHOLD INTEREST,  SUBLET THE EQUIPMENT OR OTHERWISE PERMIT THE EQUIPMENT
TO BE  OPERATED  OR USED BY, OR TO COME INTO OR  REMAIN IN THE  POSSESSION  OF,
ANYONE BUT LESSEE.  No  assignment  or  sublease,  whether  authorized  in this
Section  or in  violation  of the terms  hereof,  shall  relieve  Lessee of its
obligations, and Lessee shall remain primarily liable, hereunder and under each
Schedule.  Any unpermitted  assignment,  transfer,  encumbrance,  delegation or
sublease by Lessee shall be void ab initio.

                  (b) Lessor may assign any or all of its rights,  obligations,
title and interest hereunder,  or the right to enter into any Schedule,  or may
resell  (through  syndication,  assignment,  participation  or  placements)  an
interest in any or all of the  Equipment,  this Lease or any  Schedule.  Lessee
agrees that it will pay all rent and other amounts  payable under each Schedule
to the ALessor@ named therein;  provided,  however,  if Lessee receives written
notice of an assignment from Lessor, Lessee will pay all rent and other amounts
payable under any assigned Schedule to such assignee or as instructed by Lessor
and such  assignee.  Each  Schedule,  incorporating  by reference the terms and
conditions of this Lease,  constitutes a separate  instrument of lease, and the
ALessor@  named  therein or its  assignee  shall  have all  rights as  ALessor@
thereunder separately  exercisable by such named Lessor or assignee as the case
may be, exclusively and independently of Lessor or any assignee with respect to
other Schedules  executed pursuant hereto.  Lessee agrees to confirm in writing
receipt of any notice of assignment,  syndication,  participation or placement,
as reasonably  may be requested by Lessor or any such  assignee or  participant
(collectively,  the AAssignee@).  Lessee hereby waives and agrees not to assert
against  any  such  Assignee  any  defense,   setoff,   recoupment,   claim  or
counterclaim  which Lessee has or may at any time hereafter have against Lessor
or any person other than such Assignee, for any reason whatsoever.  Lessee will
provide  reasonable  assistance to Lessor in whatever manner necessary in order
to permit Lessor to complete any resale, syndication, assignment, participation
or placement of the transaction  contemplated by this Lease, including (but not
limited  to)  (1)  prompt  assistance  in  the  preparation  of an  information
memorandum  and  the  verification  of the  completeness  and  accuracy  of the
information  contained  therein;  (2)  preparation  of offering  materials  and
projections by Lessees and their advisors  taking into account the  transaction
contemplated by this Lease; (3) provide Lessor with all information  reasonably
deemed  necessary  by Lessor to  successfully  complete  the  syndication;  (4)
confirmation as to the accuracy and  completeness  of such offering  materials,
information and projections;  (5) participation of each and all Lessees= senior
management in meetings and conference  calls with  potential  investors at such
times and  places as Lessor  reasonably  may  request;  and (6) using  Lessees=
reasonable  best  efforts  insure that the  syndication  efforts  benefit  from
Lessees= existing lending relationships. Lessee agrees that any such assignment
shall not materially  change Lessee's duties or obligations  under the Lease or
any Schedule  nor  materially  increase  Lessee's  risks or burdens.  Upon such
assignment  and except as may otherwise be provided  therein all  references in
this Lease to Lessor shall include such assignee.

                  (c)  Subject  always to the  foregoing,  this  Lease and each
Schedule  inure to the benefit of, and are binding  upon,  the  successors  and
assigns of the parties hereto and thereto, as the case may be.

         18. END OF LEASE  OPTIONS.  Each of the  Schedules is  designated as a
Series A Schedule, a Series B Schedule. Upon the expiration of the term of each
Schedule,  Lessee shall return, or purchase, or renew the term with respect to,
all (but not less than all) of the  Equipment  leased under all  Schedules of a
particular Series executed hereunder upon the following terms and conditions.

                  (a) Renewal. If Lessee shall not have exercised its option to
return the Equipment or its purchase  option  pursuant to this Section,  Lessee
shall have the option  (subject  to Lessor=s  credit  approval of Lessee at the
time of such exercise of the option),  upon the expiration of the Basic Term of
each Schedule of a particular  Series to be executed under this Lease, to renew
the Lease with respect to all, but not less than all, of the  Equipment  leased
under all Schedules of that Series executed hereunder for the Renewal Term at a
periodic rent based on the Fair Market Rental Value.  As used herein,  ARenewal
Term@  shall mean that period as may be  mutually  agreed upon in  negotiations
between Lessor and Lessee, subject to the remaining economic useful life of the
Equipment; and AFair Market Rental Value@ shall be deemed to be an amount equal
to the rental obtainable in an arm=s length  transaction  between a willing and
informed  Lessor and a willing and informed Lessee under no compulsion to lease
(and  assuming  that, as of the date of  determination,  the Equipment is in at
least the  condition  required by Section 13 of the Lease).  If the parties are
unable to agree on the Fair Market Rental Value of the  Equipment,  then Lessor
and Lessee  shall,  at Lessee=s  expense,  obtain  appraisal  values from three
independent  appraisers (one to be selected by Lessor,  one by Lessee,  and the
other by the two selected by Lessor and Lessee; each of whom must be associated
with a professional  organization of equipment or personal property appraisers,
such as the American  Society of Appraisers) and the average Fair Market Rental
Value as determined by such appraisers shall be binding on the parties hereto.

                  (b) Purchase.  If Lessee shall not have  exercised its option
to renew  this Lease or its option to return  the  Equipment  pursuant  to this
Section,  Lessee shall have the option, upon the expiration of the term of each
Schedule, to purchase all (but not less than all) of the Equipment described on
all  Schedules of a particular  Series  executed  hereunder  upon the following
terms and conditions: If Lessee desires to exercise this option with respect to
the  Equipment,  Lessee  shall  pay to  Lessor on the last day of the term with
respect  to  each  individual  Schedule  of that  Series,  in  addition  to the
scheduled  rent (if any)  then due on such  date and all  other  sums  then due
hereunder,  in  cash  the  purchase  price  for  the  Equipment  so  purchased,
determined as hereinafter  provided.  The purchase price of the Equipment shall
be an amount equal to the Fixed  Purchase Price of such Equipment (as specified
in the Schedule) plus all taxes and charges upon sale and all other  reasonable
and  documented  expenses  incurred  by Lessor in  connection  with such  sale,
including,  without  limitation,  any such expenses  incurred based on a notice
from  Lessee  to Lessor  that  Lessee  intended  to  return  any such  items of
Equipment.  Upon  satisfaction  of the conditions  specified in this Paragraph,
Lessor  will  transfer,  on an AS IS,  WHERE  IS  BASIS,  without  recourse  or
warranty,  express or implied,  of any kind whatsoever (AAS IS BASIS@) , all of
Lessor's  interest in and to such  Equipment.  Lessor  shall not be required to
make and may  specifically  disclaim any  representation  or warranty as to the
condition of such Equipment and other matters (except that Lessor shall warrant
that it has conveyed  whatever  interest it received in the Equipment  free and
clear of any lien or encumbrance created by Lessor).

                  (c) Return.  Unless Lessee shall have exercised its option to
renew this Lease or its  purchase  option  pursuant to this  Section,  upon the
expiration of the term of each Schedule,  Lessee shall return all (but not less
than all) of the Equipment  described on all  Schedules of a particular  Series
executed hereunder,  to Lessor upon the following terms and conditions:  Lessee
shall  (i) pay to  Lessor  on the  last day of the term  with  respect  to each
individual  Schedule of that Series, in addition to the scheduled rent then due
on such date (if any) and all other sums then due hereunder,  a terminal rental
adjustment amount equal to the Fixed Purchase Price of such Equipment, and (ii)
return the Equipment to Lessor in accordance  with the provisions of Section 13
of the Lease. Thereafter,  upon return of all of the Equipment described on all
Schedules of that Series  executed  hereunder,  Lessor and Lessee shall arrange
for the commercially  reasonable sale of such Equipment.  Upon  satisfaction of
the conditions specified in this Paragraph,  Lessor will transfer,  on an AS IS
BASIS, all of Lessor's  interest in and to such Equipment.  Lessor shall not be
required to make and may specifically  disclaim any  representation or warranty
as the condition of such Equipment and other matters  (except that Lessor shall
warrant that it has conveyed  whatever  interest it received in such  Equipment
free and clear of any liens or encumbrances  created by Lessor).  Upon the sale
of such Equipment the sales proceeds with respect to the Equipment sold will be
paid to, and held and applied  by,  Lessor as follows:  Lessor  shall  promptly
thereafter  pay to Lessee an  amount  equal to the  Residual  Risk  Amount  (as
specified  in the  Schedule)  of such  Equipment  (less all  reasonable  costs,
expenses and fees, including storage,  reasonable and necessary maintenance and
other  remarketing fees incurred in connection with the sale of such Equipment)
plus all net  proceeds,  if any,  of such sale in excess of the  Residual  Risk
Amount of such Equipment and applicable taxes, if any.

                  (d) Notice of  Election.  Lessee  shall give  Lessor  written
notice of its  election of the options  specified in this Section not less than
one hundred thirty-five (135) days nor more than three hundred sixty-five (365)
days before the  expiration  of the Basic Term or any Renewal Term of the first
Schedule of a particular  Series to be executed under this Lease. Such election
shall be effective with respect to all Equipment  described on all Schedules of
that Series executed hereunder.  If Lessee fails timely to provide such notice,
without further action Lessee automatically shall be deemed to have elected (1)
to renew the term of this Lease  pursuant to Paragraph (a) of this Section if a
Renewal Term is then  available  hereunder,  or (2) to purchase  the  Equipment
pursuant  to  Paragraph  (b) of this  Section  if a  Renewal  Term is not  then
available hereunder.

         19. JOINT AND SEVERAL  OBLIGATIONS.  The obligations of Transit Group,
Inc., Carolina-Pacific  Distributors,  Inc., Certified Transport, Inc., Rainbow
Trucking Services,  Inc.,  Transit Leasing,  Inc. f/k/a Capitol Warehouse Inc.,
Transportation  Resources and Management,  Inc., Carroll Fulmer & Co., Inc., KJ
Transportation,  Inc., Service Express,  Inc.,  Diversified Trucking Corp., J&L
Truck Leasing of Farmington, Inc. and Northstar Transportation,  Inc. are joint
and several.  Each  reference to the term ALessee@  shall be deemed to refer to
each of Transit Group, Inc.,  Carolina-Pacific  Distributors,  Inc.,  Certified
Transport,  Inc., Rainbow Trucking Services,  Inc., Transit Leasing, Inc. f/k/a
Capitol Warehouse Inc., Transportation Resources and Management,  Inc., Carroll
Fulmer & Co., Inc., KJ Transportation, Inc., Service Express, Inc., Diversified
Trucking   Corp.,   J&L  Truck  Leasing  of  Farmington,   Inc.  and  Northstar
Transportation,  Inc.; each representation and warranty made by Lessee shall be
deemed to have been made by each such party;  each covenant and  undertaking on
the part of Lessee shall be deemed individually applicable with respect to each
such party;  and each event  constituting  a Default  under this Lease shall be
determined with respect to each such party. A separate action or actions may be
brought  and  prosecuted  against  any such party  whether an action is brought
against any other party or whether any other party is joined in any such action
or actions.  Each such party waives any right to require Lessor to: (a) proceed
against any other party;  (b) proceed against or exhaust any security held from
any other party;  or (c) pursue any other remedy in Lessor's power  whatsoever.
Each of Carolina-Pacific Distributors, Inc., Certified Transport, Inc., Rainbow
Trucking Services,  Inc.,  Transit Leasing,  Inc. f/k/a Capitol Warehouse Inc.,
Transportation  Resources and Management,  Inc., Carroll Fulmer & Co., Inc., KJ
Transportation,  Inc., Service Express,  Inc.,  Diversified Trucking Corp., J&L
Truck Leasing of Farmington,  Inc. and Northstar  Transportation,  Inc.  hereby
appoints Transit Group,  Inc. as its agent for the limited purpose of executing
any and all documents  required to be executed  pursuant to this Lease, for the
purpose of receiving notices required hereunder,  and for the purpose of giving
any  consent  required  to be  given  on  the  part  of  Lessee  hereunder.  In
furtherance of the foregoing,  the parties  acknowledge and agree that: notices
hereunder  required to be provided to Lessee  shall be effective if provided to
Transit  Group,  Inc.;  any  consent on the part of Lessee  hereunder  shall be
effective when provided by Transit Group,  Inc. and Lessor shall be entitled to
rely upon any notice or consent given by Transit Group, Inc. as being notice or
consent given by Lessee hereunder.

         In the event any obligation of Lessee under this Lease is deemed to be
an  agreement  by any  individual  Lessee to answer  for the debt or default of
another  individual  Lessee  (including  each other) or as a  hypothecation  of
property as security therefor, each Lessee represents and warrants that: (x) no
representation  has been  made to it as to the  creditworthiness  of any  other
obligor, and (y) it has established adequate means of obtaining from each other
obligor on a continuing  basis,  financial or other  information  pertaining to
each  other  obligor's  financial  condition.   Each  Lessee  expressly  waives
diligence,  demand,  presentment,  protest  and notice of every kind and nature
whatsoever, consents to the taking by Lessor of any additional security for the
obligations  secured hereby,  or the alteration or release in any manner of any
security  now or  hereafter  held in  connection  with any  obligations  now or
hereafter  secured by this Lease,  and consents that Lessor and any obligor may
deal with each other in connection with said obligations or otherwise, or alter
any contracts now or hereafter existing between them, in any manner whatsoever,
including without limitation the renewal, extension,  acceleration,  changes in
time for payment,  and increases or decreases in any rent,  rate of interest or
other  amounts  owing,  all without in any way altering  the  liability of each
Lessee, or affecting any security for such  obligations.  Should any default be
made in the payment of any such  obligations  or in the terms or  conditions of
any security held,  Lessor is hereby  expressly given the right, at its option,
to proceed in the enforcement of this Lease  independently  of any other remedy
or security it may at any time hold in connection with such obligations secured
and it shall not be  necessary  for  Lessor to proceed  upon or against  and/or
exhaust any other  security or remedy  before  proceeding to enforce its rights
against  any  Lessee.  Each  Lessee  further  waives any right of  subrogation,
reimbursement,  exoneration,  contribution,  indemnification,  setoff  or other
recourse in respect of sums paid to Lessor by any Lessee.

         20. MISCELLANEOUS.  (a) This Lease, the Riders annexed hereto and each
Schedule  constitute the entire  agreement  between the parties with respect to
the subject  matter hereof and thereof and shall not be  rescinded,  amended or
modified  in any  manner  except by a  document  in  writing  executed  by both
parties.  (b) Any provision of this Lease which is prohibited or  unenforceable
in any  jurisdiction  shall,  as to such  jurisdiction,  be  ineffective to the
extent  of  such  prohibition  or  unenforceability  without  invalidating  the
remaining  provisions hereof, and any such prohibition or  unenforceability  in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.  (c) The  representations,  warranties and covenants of
Lessee herein shall be deemed to be continuing and to survive the execution and
delivery of this Lease,  each  Schedule  and any other  Lease  Documents.  Each
execution by Lessee of a Schedule shall be deemed a reaffirmation  and warranty
that there  shall  have been no  material  adverse  change in the  business  or
financial  condition of Lessee from the date of execution hereof.  With respect
to each Schedule,  the obligations of Lessee under Sections 7, 8, 9, 10, 13 and
14 hereof, together with any of Lessee's obligations under the other provisions
of this Lease (as  incorporated  therein) which have accrued but not been fully
satisfied,  performed or complied with prior to the cancellation or termination
of such Schedule,  shall survive the cancellation or termination thereof to the
extent necessary for the full and complete performance of such obligations. (d)
Lessor  represents  and  covenants to Lessee that Lessor has full  authority to
enter into this Lease and any other  Lease  Documents  to which it may become a
party,  and so long as no default or Default occurs with respect to a Schedule,
neither  Lessor  nor any  person  authorized  by Lessor  shall  interfere  with
Lessee's  right to peaceably and quietly  possess and use the Equipment  during
the term thereof,  subject to the terms and provisions hereof. (e) All expenses
incurred  by Lessor in  connection  with (1) the  filing or  recording  of real
property  waivers  and  Uniform  Commercial  Code  statements,  (2) lien search
reports and copies of filings with respect to Lessee and/or the Equipment,  and
(3) the negotiation,  documentation and closing of the transaction contemplated
by  this  Lease  (including,  without  limitation,  expenses  of  counsel,  due
diligence,  independent appraisal,  environmental audits and field audits), and
the  enforcement  of  Lessor=s  rights  hereunder,  shall be for the account of
Lessee and shall be payable by Lessee upon demand. (f) Any rent or other amount
not paid to Lessor when due hereunder  shall bear  interest,  from the due date
until paid,  at the lesser of twelve (12) percent per annum or the maximum rate
allowed by law (the ALate Charge Rate@).  (g) If Lessee fails to perform any of
its  obligations  hereunder  with respect to a Schedule,  Lessor shall have the
right, but shall not be obligated,  to effect such performance,  and the amount
of any out of pocket  and other  reasonable  expenses  of  Lessor  incurred  in
connection with such  performance,  together with interest  thereon at the Late
Charge Rate,  shall be payable by Lessee upon demand.  Lessor's  effecting such
compliance shall not be a waiver of Lessee's  default.  (h) Lessee  irrevocably
appoints  Lessor as  Lessee's  attorney-in-fact  (which  power  shall be deemed
coupled with an interest)  to execute,  endorse and deliver any UCC  statements
and any documents  and checks or drafts  relating to or received in payment for
any loss or damage under the policies of insurance  required by the  provisions
of  Section  11 hereof,  but only to the  extent  that the same  relates to the
Equipment.  (i) LESSOR AND LESSEE  HEREBY  WAIVE TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO WHICH LESSEE  AND/OR  LESSOR MAY BE PARTIES  ARISING OUT OF OR IN
ANY WAY  PERTAINING  TO THIS  LEASE.  LESSEE  AUTHORIZES  LESSOR  TO FILE  THIS
PROVISION  WITH THE CLERK OR JUDGE OF ANY COURT  HEARING ANY SUCH CLAIM.  IT IS
HEREBY AGREED AND UNDERSTOOD THAT THIS WAIVER  CONSTITUTES A WAIVER OF TRIAL BY
JURY OF ALL CLAIMS AGAINST  PARTIES TO SUCH ACTIONS OR  PROCEEDINGS,  INCLUDING
CLAIMS  AGAINST  PARTIES  WHO ARE NOT  PARTIES TO THIS  LEASE.  THIS  WAIVER IS
KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY THE PARTIES AND THE PARTIES HEREBY
ACKNOWLEDGE  THAT NO  REPRESENTATIONS  OF FACT OR OPINION HAVE BEEN MADE BY ANY
INDIVIDUAL  TO INDUCE  THIS  WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR
NULLIFY ITS EFFECT.  LESSOR AND LESSEE FURTHER  ACKNOWLEDGE THAT THEY HAVE BEEN
REPRESENTED  IN THE  SIGNING OF THIS LEASE AND IN THE MAKING OF THIS  WAIVER BY
INDEPENDENT LEGAL COUNSEL,  SELECTED OF THEIR OWN FREE WILL, AND THAT THEY HAVE
HAD THE  OPPORTUNITY  TO DISCUSS  THIS  WAIVER  WITH  COUNSEL.  (j) All notices
(excluding  billings and  communications  in the  ordinary  course of business)
hereunder  shall be in writing,  personally  delivered,  delivered by overnight
courier service, sent by facsimile transmission (with confirmation of receipt),
or sent by certified  mail,  return receipt  requested,  addressed to the other
party at its respective  address stated below the signature of such party or at
such other  address as such party shall from time to time  designate in writing
to the other party;  and shall be effective from the date of receipt.  (k) This
Lease and all of the other Lease  Documents  shall not be effective  unless and
until accepted by execution by an officer of Lessor.  THIS LEASE AND ALL OF THE
OTHER LEASE DOCUMENTS,  AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
AND  THEREUNDER,  SHALL IN ALL  RESPECTS  BE  GOVERNED  BY,  AND  CONSTRUED  IN
ACCORDANCE  WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO
THE  CONFLICT  OF LAWS  PRINCIPLES  OF THE  STATE),  INCLUDING  ALL  MATTERS OF
CONSTRUCTION,  VALIDITY  AND  PERFORMANCE,  REGARDLESS  OF THE  LOCATION OF THE
EQUIPMENT.  The parties agree that any action or  proceeding  arising out of or
relating to this Lease shall be commenced in any state or Federal court located
in New York County,  City of New York,  State of New York, and that such courts
shall have exclusive  jurisdiction to hear and determine any claims or disputes
between  or  among  any of  the  parties  hereto  relating  to the  transaction
contemplated  by this Lease,  and any  investigation,  litigation or proceeding
related to or arising  out of any such  matters;  provided,  however,  that the
parties hereto acknowledge that any appeals from those courts may be heard by a
court located outside of such jurisdiction. Each party hereto expressly submits
and consents in advance to such jurisdiction in any action or suit commenced in
any such court, and hereby waives any objection which such party may have based
upon lack of personal  jurisdiction,  improper venue or inconvenient forum. The
parties  further  agree that a summons and  complaint  commencing  an action or
proceeding in any such court shall be properly served and shall confer personal
jurisdiction  if served  personally  or by certified  mail to it at its address
hereinbelow set forth, or as it may provide in writing from time to time, or as
otherwise  provided under the laws of the State of New York. (l) This Lease and
all of the other Lease  Documents may be executed in any number of counterparts
and by different  parties hereto or thereto on separate  counterparts,  each of
which,  when so executed  and  delivered,  shall be an  original,  but all such
counterparts  shall  together  consist  of but  one and  the  same  instrument;
provided, however, that to the extent that this Lease and/or the Schedule would
constitute  chattel  paper,  as such term is defined in the Uniform  Commercial
Code as in effect in any applicable  jurisdiction,  no security interest herein
or therein may be created  through the transfer or  possession of this Lease in
and of itself  without  the  transfer  or  possession  of the  original of such
Schedule and incorporating the Lease by reference;  and no security interest in
this Lease and a Schedule may be created by the transfer or  possession  of any
counterpart of such Schedule other than the original thereof.

         21.  DEFINITIONS  AND RULES OF  CONSTRUCTION.  (a) The following terms
when used in this Lease or in any of the Schedules have the following meanings:
(1) "applicable law" or "law":  any law, rule,  regulation,  ordinance,  order,
code,  common  law,  interpretation,   judgment,   directive,  decree,  treaty,
injunction,  writ, determination,  award, permit or similar norm or decision of
any governmental authority; (2) "business day": any day, other than a Saturday,
Sunday,  or legal holiday for commercial banks under the laws of the State; (3)
"UCC" or "Uniform Commercial Code": the Uniform Commercial Code as in effect in
the State or in any other  applicable  jurisdiction;  and any  reference  to an
article  (including Article 2A) or section thereof shall mean the corresponding
article or section (however termed) of any such other applicable version of the
Uniform  Commercial Code; (4)  "governmental  authority":  any federal,  state,
county,  municipal,  regional or other governmental  authority,  agency, board,
body,  instrumentality or court, in each case, whether domestic or foreign; and
(5) "person": any individual, corporation, partnership, joint venture, or other
legal entity or a governmental authority,  whether employed, hired, affiliated,
owned,  contracted with, or otherwise related or unrelated to Lessee or Lessor.
(b) The following  terms when used herein or in any of the  Schedules  shall be
construed as follows:  "herein,"  "hereof,"  "hereunder,"  etc.: in, of, under,
etc.  this Lease or such other Lease  Document in which such term  appears (and
not merely in, of,  under,  etc. the section or provision  where the  reference
occurs); "including":  containing, embracing or involving all of the enumerated
items,  but not limited to such items unless such term is followed by the words
"and limited to," or similar words; and "or": at least one, but not necessarily
only one, of the alternatives enumerated. Any defined term used in the singular
preceded by "any"  indicates  any number of the members of the relevant  class.
Any Lease  Document or other  agreement or instrument  referred to herein means
such agreement or instrument as supplemented and amended from time to time. Any
reference to Lessor or Lessee shall  include  their  permitted  successors  and
assigns. Any reference to a law shall also mean such law as amended, superseded
or replaced from time to time.  Unless otherwise  expressly  provided herein to
the  contrary,  all actions  that Lessee takes or is required to take under any
Lease Document  shall be taken at Lessee's sole cost and expense,  and all such
costs and expenses shall constitute Claims and be covered by Section 14 hereof.
To the extent  Lessor is required to give its consent or approval  with respect
to any matter, the reasonableness of Lessor's withholding of such consent shall
be determined based on the then existing circumstances; provided, that Lessor's
withholding  of its consent shall be deemed  reasonable for all purposes if (i)
the taking of the action that is the subject of such request,  might reasonably
be expected to result (in Lessor's  good faith  discretion),  in (A) a material
impairment  of  Lessor's  rights,  title or  interests  hereunder  or under any
Schedule or other Lease Document, or to the Equipment,  or (B) expose Lessor to
any Claims,  or (ii) to the extent  Lessee fails to provide  promptly to Lessor
any  filings,  certificates,  opinions or  indemnities  specified  by Lessor to
Lessee in writing.


               [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
         IN WITNESS  WHEREOF,  the parties hereto have caused this Master Lease
Agreement to be duly executed as of the day and year first above set forth.


GENERAL ELECTRIC CAPITAL CORPORATIONTRANSIT GROUP, INC.
Lessor                                    Lessee


By:  /s/ John E. Hanley                   By: /s/ Philip A. Belyew
Name:    John E. Hanley                   Name: Philip A. Belyew
Title: Senior Risk Manager                Title: CEO

     One Lincoln Centre                   2859 Paces Ferry Road
     5400 LBJ Freeway                     Suite 1740
     Suite 525                            Atlanta, Georgia  30339
     Dallas, Texas  75240                 Facsimile:  (770) 444-0246
     Facsimile:  (972) 419-3289

                                          By: /s/ Philip A. Belyew
                                          Name: Philip A. Belyew
                                          Title: CEO
                                          CAROLINA-PACIFIC DISTRIBUTORS, INC.
                                          Lessee

                                          By: /s/ Philip A. Belyew
                                          Name: Philip A. Belyew
                                          Title: CEO
                                          5265 Surrett Drive
                                          Archdale, North Carolina  27263
                                          Facsimile:  (336)434-4310


                                          CERTIFIED TRANSPORT, INC.
                                          Lessee

                                          By: /s/ Philip A. Belyew
                                          Name: Philip A. Belyew
                                          Title: CEO

                                          2415 W. Thompson Road
                                          Indianapolis, Indiana  46217
                                          Facsimile:  (317)780-6434


                                          RAINBOW TRUCKING SERVICES, INC.
                                          Lessee

                                          By: /s/ Philip A. Belyew
                                          Name: Philip A. Belyew
                                          Title: CEO

                                          2425 Ralph Avenue
                                          Louisville, Kentucky  40216
                                          Facsimile:  (502)448-8992


                                          TRANSPORTATION RESOURCES
                                          AND MANAGEMENT, INC.
                                          Lessee

                                          By: /s/ Philip A. Belyew
                                          Name: Philip A. Belyew
                                          Title: CEO
                                          
                                          5003 US 30 West
                                          Suite 1
                                          Fort Wayne, Indiana  46898
                                          Facsimile:  (219)471-0833


                                          CARROLL FULMER & CO., INC.
                                          Lessee

                                          By: /s/ Philip A. Belyew
                                          Name: Philip A. Belyew
                                          Title: CEO

                                          8340 American Way
                                          Groveland, Florida  34736
                                          Facsimile:  (352)429-1010


                                          KJ TRANSPORTATION, INC.
                                          Lessee

                                          By: /s/ Philip A. Belyew
                                          Name: Philip A. Belyew
                                          Title: CEO

                                          6070 Collette Road
                                          Farmington, New York  14425
                                          Facsimile:  (716)924-9959


                                          SERVICE EXPRESS, INC.
                                          Lessee

                                          By: /s/ Philip A. Belyew
                                          Name: Philip A. Belyew
                                          Title: CEO

                                          504 Bear Creek Cut Off Road
                                          Tuscaloosa, Alabama  35403
                                          Facsimile:  (205)345-6900


                                          DIVERSIFIED TRUCKING CORP.
                                          Lessee

                                          By: /s/ Philip A. Belyew
                                          Name: Philip A. Belyew
                                          Title: CEO

                                          309 Williamson Avenue
                                          Opelika, AL 36804-7313
                                          Facsimile: (334-)742-0592

                                          NORTHSTAR TRANSPORTATION, INC.
                                          Lessee

                                          By: /s/ Philip A. Belyew
                                          Name: Philip A. Belyew
                                          Title: CEO
                                          
                                          410 Twitchell Road
                                          Dothan, Alabama  36303
                                          Facsimile:  (334)712-2499

                                          TRANSIT LEASING, INC. f/k/a
                                          CAPITOL WAREHOUSE INC.
                                          Lessee


                                          By: /s/ Philip A. Belyew
                                          Name: Philip A. Belyew
                                          Title: CEO

                                          Facsimile:(770)444-0246

                                          J&L TRUCK LEASING OF FARMINGTON, INC.

                                          By: /s/ Philip A. Belyew
                                          Name: Philip A. Belyew
                                          Title: CEO

                                          Facsimile:(716)924-9959